Swarms of minicabs and limousines could be about to take on the Vic­torian taxi industry, let loose by a ­combination of regulatory reform and technological innovation.

Former competition regulator
Allan Fels
, appointed to shake up the industry by Victorian Premier
Ted Baillieu
, has proposed swinging the axe at regulations holding back the chauffeured hire car industry.

He wants to remove a public ­interest test on issuing licences, cut licence prices by a third, and remove requirements that hire cars be luxury vehicles less than seven years old and cannot display advertising.

The recommendations are in a draft report released in May.

Hire cars differ from taxis because they are allowed to do only pre-booked work.

The push for change comes at an opportune time for the makers of two new apps that allow customers to book the nearest hire cars on their phones, Ingogo and GoCatch.

GoCatch chief executive and co-founder Andrew Campbell said hire car companies had expressed interest in working with the app.

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In London, minicabs outnumber black cabs by more than two to one; while in New York, town cars and “livery cars" outnumber yellow cabs by more than three to one.

In Australia, most hire cars are owner-drivers rather than company owned, and only half are associated with a network.

Ingogo founder Hamish Petrie said traditionally there had not been the technology to support a hire car network, but “with technology changing things, there is no difference between the two at some point".

His company has distributed 1000 smartphones to taxi drivers to get them as active providers in his network.

Professor Fels has argued that the hire car market could take off given the right technology.

“It is hard to say exactly what will happen [but] we are starting to see it happen in other parts of the world."

Professor Fels cited as an example the Addison Lee minicab system in the UK. Addison Lee has 2400 vehicles, and uses a GPS-enabled system to allocate the nearest taxi to bookings that come in from mobile phones.

It has a response time of four minutes and offers fares that are average.

“The industry has not moved that fast on technology," Professor Fels said.

“ It could be much further down the track on technology. This will free it up to do so, put them under more pressure."

Not everyone enjoys the pressure.

Gerard Mahoney runs stretch limousines and classic cars as hire cars. He said that deregulation would ruin the industry, which had much higher satisfaction ratings than taxis.

“People will come in and out of the industry and you’ll start to get an influx of cowboys into the industry, which will lower the standards," he warned.

Professor Fels’s draft report recommended that the government ­provide taxi licences at $20,000 a year to help cut the cost of taxi licences and the price of leasing those licences to drivers.

Victorian Metropolitan licences, which are often owned by investors, fell from over $500,000 to $475,000 while the inquiry was running.

They have been advertised at around $440,000 after the draft report’s release.

Professor Fels said: “They may fall further depending on whether they think this will be implemented."

The Victorian government has not indicated whether it will implement the findings of the final report, which is due in July.